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Tips for driving customer loyalty in the restaurant industry

Aug. 29, 2016

By Geoff Smith

According toColloquy’s 2015 Loyalty Census, 54.8 million Americans are enrolled in a restaurant loyalty program. Customers want to be rewarded for spending time and money on their favorite brands, and companies are ponying up to offer rewards that keep customers coming back. Restaurants are paving the way in this market space by developing innovative loyalty programs.

Since 2012, the industry has seen a 107 percent increase in loyalty membership. The prevalence of smartphones—owned by 88 percent of millennials (aged 18-34)—has encouraged restaurant marketers to trade in outdated punch cards for a loyalty program that appeals to this generation.

Integrating technology allows restaurateurs to capture consumer data and send more relevant offers that entice patrons to increase dining frequency, share their experiences and ultimately spend more. Restaurant brands that adopt multi-channel loyalty and engagement strategies can change the way customers interact with their businesses and enhance their bottom line.

A multi-channel loyalty and engagement strategy seeks to place brands at the top of customers’ minds. These programs leverage technology like smartphones, social media, and proximity detection capabilities to engage people where they shop, eat and live.

When wisely implemented, a multi-channel loyalty and engagement program helps to better identify customers’ behaviors, habits, likes, and dislikes, while offering a portal to branded experiences. Once collected, the data aids in segmenting customer profiles, helping brands entice customers with what they want, when they want it.

Starbucks’ loyalty program is a strong example of how businesses in the food and beverage space are taking advantage of multi-channel loyalty to build branded experiences. Starbucks Rewards gives customers the ability to access information about their account, offers a smartphone app to place orders and stores payment information in a mobile wallet.

As restaurant marketers attempt to create easy-to-use platforms, there are some important opportunities to consider.

Opportunities for quick serve and casual dining restaurants

Today, a number of QSRs have some form of loyalty program in place, but most don't account for the opportunities to engage with customers outside of POS transactions. Customers should be able to earn points or other rewards for interacting with the brand beyond their physical location. Brands that seek to engage and reward customers on their phones, at their computers, and on social channels have an advantage when it comes to garnering customer attention.

For those QSRs seeking to enter the mobile app space, numerous opportunities exist to create fan engagement and to drive traffic to their stores.Rita’s Ice, for example, uses an app not only to help customers track their engagement, but also to encourage customers to "share their happiness" with the brand on social media sites like Facebook, Instagram, and Twitter. These sites are all integrated into Rita's Ice app and enable customers to earn loyalty points that can be redeemed in Rita's Ice stores.

However, a dedicated mobile app isn’t the only option for multi-channel loyalty marketing. Buffalo Wild Wings rewards customers with points for checking into its restaurants and updating profiles. These tactics help drive restaurant visits while providing the brand with additional consumer data.

All restaurants should consider the following loyalty strategies:

Build emotional connections: Customers are more likely to consistently interact with brands to which they feel a common emotional bond. Chick-fil-A leverages this connection by capitalizing on its iconic mascot—cows—by encouraging fans to enjoy Chick-fil-A food and "save the cows." Separately, the brand rewards customers who dress in cow-like costumes with free entrées during its annual Cow Appreciation Day.

Offer value: Brands should go beyond discounts and consider offering experiences to their customers. Papa John's lets members earn points toward a free pizza when they place online orders. To offer greater value, the brand also includes tax and delivery fees as part of the freebie.

Be social: Customers appreciate being rewarded for their brand interactions on social media. Brooklyn's -321° Ice Cream shop gives a free ice cream to their customers who share pictures from the shop on Instagram once the picture surpasses 100 likes.

Engage patrons: Sometimes, customers just want to have fun with a brand. As part of its digital loyalty program, Chili's uses Ziosk tablets, enabling customers to engage with its loyalty program while they dine. Beyond food purchases, members can earn points by participating in "challenges," such as trying the latest menu item or referring friends to the program.

Today, consumers expect brands to cater to them with specificity, exclusivity, and enthusiasm. To meet these expectations, restaurant brands must think about their customers and the way that they are interacting in the world today. They should develop branded experiences that interface with customers' needs everywhere and across the channels that matter most to them.

Only when brands respond to and participate in their customers' lives across channels can they take advantage of the myriad data and engagement opportunities that now exist. Restaurant companies that accomplish this will have the power to control the narrative about their brands and build a stronger rapport with their customers and strengthen loyalty.